Forex Today: Markets turn cautious to start the week

Eren Sengezer FXStreet

Here is what you need to know on Monday, July 17:

Investors stay cautious at the beginning of the week as they look for the next catalyst. Following Friday's modest rebound, the US Dollar Index, which tracks the US Dollar's (USD) performance against a basket of six major currencies, fluctuates in a tight channel slightly below 100.00 early Monday. Several European Central Bank (ECB) policymakers, including President Christine Lagarde, will be delivering speeches during the European trading hours. The Federal Reserve Bank of New York's Empire State Manufacturing Index will be the only data featured in the US economic docket.

In the early Asian session, the data from China revealed that the real Gross Domestic Product expanded at an annual rate of 6.3% in the second quarter. This reading followed the 4.5% growth recorded in the first quarter but fell short of the market expectation of 7.3%. Other data from China showed that Retail Sales increased 3.1% on a yearly basis in June, down sharply from 12.7% in May, and Industrial Production expanded 4.4% in the same period. In a statement, China's National Bureau of Statistics (NBS) said that the economy was improving, while noting that the foundation of the domestic economic recovery was not solid. Shanghai Composite Index is down nearly 1% on the day following these data releases and US stock index futures trade modestly lower on the day.

AUD/USD came under renewed bearish pressure on mixed Chinese data and was last seen trading in negative territory at around 0.6800. Early Tuesday, the Reserve Bank of Australia (RBA) will release the minutes of the July 4 policy meeting.

EUR/USD registered its biggest one-week gain of the year, adding nearly 250 pips last week. The pair holds steady above 1.1200 in the European morning.

GBP/USD edged lower on Friday but closed the week sharply higher. The pair stays in a consolidation phase below 1.3100 in the European session.

After having touched its weakest level in two months below 137.50 early Friday, USD/JPY gained traction and spanned a six-day losing streak. The pair, however, finds it difficult to extend its rebound and moves up and down in a tight channel at around 138.50.

Gold benefited from retreating US yields last week and gained 1.5%. XAU/USD stays relatively quiet on Monday and trades at around $1,950.

Bitcoin spent the weekend moving sideways slightly above $30,000 and finds it difficult to make a decisive move in either direction to start the week. Ethereum edged lower over the weekend but managed to stabilize above $1,900 on Monday.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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